Conservatives Say Shutter Michigan ED Organizations

Here is an extreme view of government's role in economic affairs--one in this case that says government should not play a direct role in promoting and stimulating economic development.

Two Senate committees examining Michigan’s efforts to spur economic development should take action to abolish the state’s two primary development agencies, the Michigan Economic Development Corporation (MEDC) and the Michigan Economic Growth Authority (MEGA), and redirect the state’s development strategy, the Mackinac Center for Public Policy is saying.

"The state government should get out of the business of picking economic winners — something even Wall Street mavens can’t do consistently — and focus on fixing the fundamentals: schools, infrastructure, a lower tax burden, and a generally improved business climate for everybody," said Michael LaFaive, fiscal policy analyst for the Mackinac Center.

I'm sure that my good friend Don Jakeway, who will take the reins of MEDC shortly, will not be exactly pleased with this denouncement.

My view on this one is that there is no way to disentangle government from the economy. Government is an industry that participates in building economies on a local, state, national and international level. LaFaive suggests the state should simply stick to creating a climate for economic development through infrastructure, education, etc. That sounds good is concept, but Michigan businesses actually want MEDC and MEGA to help them in a more direct way to become more competitive.

States do need to be careful about the policies actions they adopt to support economic development. They should not do what the private marketplace should and can do better. At the same time, Michigan would come out on the losing end of the stick if it decided to dump its economic development programs while all other states continue with theirs. Once again, unilateral disarmament is not the answer.

Mackinac ED Site here.

Read more here.